Correlation Between Magni Tech and Farm Price
Can any of the company-specific risk be diversified away by investing in both Magni Tech and Farm Price at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Magni Tech and Farm Price into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magni Tech Industries and Farm Price Holdings, you can compare the effects of market volatilities on Magni Tech and Farm Price and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Magni Tech with a short position of Farm Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magni Tech and Farm Price.
Diversification Opportunities for Magni Tech and Farm Price
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magni and Farm is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Magni Tech Industries and Farm Price Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farm Price Holdings and Magni Tech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Magni Tech Industries are associated (or correlated) with Farm Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farm Price Holdings has no effect on the direction of Magni Tech i.e., Magni Tech and Farm Price go up and down completely randomly.
Pair Corralation between Magni Tech and Farm Price
Assuming the 90 days trading horizon Magni Tech is expected to generate 1.4 times less return on investment than Farm Price. But when comparing it to its historical volatility, Magni Tech Industries is 1.94 times less risky than Farm Price. It trades about 0.11 of its potential returns per unit of risk. Farm Price Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Farm Price Holdings on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Farm Price Holdings or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 57.2% |
| Values | Daily Returns |
Magni Tech Industries vs. Farm Price Holdings
Performance |
| Timeline |
| Magni Tech Industries |
| Farm Price Holdings |
Magni Tech and Farm Price Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magni Tech and Farm Price
The main advantage of trading using opposite Magni Tech and Farm Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magni Tech position performs unexpectedly, Farm Price can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Farm Price will offset losses from the drop in Farm Price's long position.| Magni Tech vs. Southern Steel Bhd | Magni Tech vs. Al Aqar Healthcare | Magni Tech vs. Sports Toto Berhad | Magni Tech vs. KPJ Healthcare Bhd |
| Farm Price vs. Malayan Banking Bhd | Farm Price vs. Public Bank Bhd | Farm Price vs. Petronas Chemicals Group | Farm Price vs. Tenaga Nasional Bhd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |